Medieval and Renaissance monarchs frequently "debased" their currency by mixing precious metals with cheaper base metals to fund wars, causing massive inflation.
The creation of Bitcoin in 2009 heralded a new era of decentralized finance (DeFi), challenging the monopoly of central banks. However, the concept of non-state, decentralized currency is not entirely new. To understand the future of cryptocurrency, we must look at the "Narys istoriyi" (historical outline) of the Middle Ages and the Early Modern period. During these times, financial systems were highly fragmented, localized, and largely free from the absolute control of a single sovereign entity. To understand the future of cryptocurrency, we must
This paper draws parallels between the decentralized nature of modern cryptocurrency and the economic/social structures of those historical eras. 🏰 1
🏰 1. The Medieval Economy: Decentralization and Private Ledger Trust non-physical value transfer
Merchants developed paper bills of exchange to avoid carrying heavy, dangerous physical gold across pirate-infested seas. This was the birth of abstract, non-physical value transfer, directly paralleling how cryptocurrencies allow value to cross borders instantly without physical movement.
The defining struggle of the Early Modern era was the rise of the centralized nation-state and its desire to monopolize money (seigniorage).
The Middle Ages (roughly 5th to 15th century) were characterized by extreme political and economic fragmentation.